Ah, implicature, how I wish judges understood you. A product labeled “100% Grated Parmesan
Cheese” is, apparently, ambiguous—it could mean the product has a bunch of
different ingredients, but the parmesan component is 100% grated, rather than
only partially grated. This is nonsense
for a product that purports to be cheese, though it would make sense for a non-cheese-only product with a “made with 100% grated parmesan cheese” label. In fact, the common-sense comparison is the
challenged phrase with or without “made with”—on its own, the “100%” naturally
applies to all the words following it.

Anyway, plaintiffs alleged that they were misled by the labels
because the products contained a nontrivial amount of cellulose. Each product’s ingredient list disclosed the
non-cheese ingredients, in smaller, less conspicuous print. Each ingredient
list states that the cellulose is added “to prevent caking.”

The court agreed that plaintiffs had Article III standing,
having purchased a product allegedly worth less than what they paid and what
they were promised.

Synthesizing consumer protection precedents from multiple
jurisdictions, the court concluded that “[w]here a plaintiff contends that
certain aspects of a product’s packaging are misleading in isolation, but an
ingredient label or other disclaimer would dispel any confusion, the crucial
issue is whether the misleading content is ambiguous; if so, context can cure
the ambiguity and defeat the claim, but if not, then context will not cure the
deception and the claim may proceed.” This
isn’t entirely consistent with the cases the court quotes, such as the 9th
Circuit’s Williams—here’s the quote
the court pulls from Williams: deceptive
marketing claims survived a motion to dismiss where there were “a number of
features of the [front of the packaging] … which could likely deceive a
reasonable consumer,” and a consumer thus “should [not] be expected to look
beyond misleading representations on
the front of the box to discover the truth from the ingredient list” (emphasis
added). The question is whether a
consumer might rely on the product name without checking the ingredient list,
and ambiguity can certainly play a role there, but a consumer might make
inferences even from a theoretically “ambiguous” claim and not check the
label. Of course, the larger problem
here is that there’s nothing ambiguous about “100% Grated Parmesan Cheese” in
context.

The court continued: “consumers who interpret ambiguous
statements in an unnatural or debatable manner do so unreasonably if an
ingredient label would set them straight.”
The court conflates “unnatural” with “debatable” here, I think—if a
substantial portion of consumers are confused by a claim, the fact that others
aren’t, and that the question in general is “debatable,” shouldn’t matter
(absent some cost-benefit analysis, at least—so if there’s a good way of
communicating the truth to avoid deceiving the relevant subset of consumers,
that should be used).

The court analogized people who thought that “100% Grated
Parmesan Cheese” meant that the product was 100% parmesan cheese to people who
thought that Froot Loops were made with fruit.
The phrase was ambiguous because “it also might be an assertion that
100% of the cheese is parmesan cheese, or that the parmesan cheese is 100%
grated. Reasonable consumers would thus need more information before concluding
that the labels promised only cheese and nothing more, and they would know
exactly where to look to investigate—the ingredient list.” Thus, the labels
weren’t deceptive.

Comment: that statement might avoid perjury because of this
equivocation, but that’s not the standard for consumer protection cases. A reasonable consumer shouldn’t have to ask
follow-up questions when the product says on the front that it’s 100% one
thing.

The court thought that the nothing-but-cheese reading was
the least plausible of its three
possible interpretations, because it thought that consumers should know that a
product that was packaged and shelf-stable at room temperature could not be
pure cheese. Really? Because I buy
parmesan in unrefrigerated-but-sealed chunks, and I’ve also been known to buy
Parmalat, a shelf-stable unrefrigerated milk.
We live in an age of miracles and wonders; I’m not saying I’d expect
cheese to last centuries, but leaving a dry cheese like parmesan sealed but
unrefrigerated seems plausible to me. Still, I’m apparently unreasonable,
because reasonable consumers “would still suspect that something other than
cheese might be in the container [of unrefrigerated, shelf-stable cheese], and
so would turn it around, enabling them to learn the truth from a quick skim of
the ingredient label.”

Anyway, warranty and unjust enrichment claims failed for the
same reason.